The Voice of Business for Long Beach

Best Western Golden Sails Downsizing As New Wage Standard For Hotel Workers Becomes Law December 21

By Joshua H. SilaventStaff Writer

December 18th, 2012 – The Long Beach City Council has certified the election results of Measure N, which legislates a minimum wage of $13 per hour for workers in the city’s largest hotels and takes effect December 21. More than 88,574 local voters supported the measure with 49,147 voting against it. It passed in all nine city council districts (refer to Election Recap in this issue for a breakdown by district).

Measure N also imposes a mandatory two percent annual increase in pay regardless of job performance or economic climate, guarantees five paid sick days per year and assures that workers receive 100 percent of guest services charges, such as mandatory gratuities attached to room service. Only hotels with 100 rooms or more are impacted.

Several hotel workers spoke at the December 11 city council meeting to express their gratitude to voters who supported their initiative. And many councilmembers offered their congratulations. But the celebration was not free of concern. Some workers told the council that they feared hotels would skirt compliance, perhaps by decreasing their number of available rooms so as to fall under the 100-room stipulation, or by cutting hours to offset the wage increase.

The Best Western Golden Sails Hotel, located at 6285 E. Pacific Coast Hwy., announced in a letter to employees December 10 that it is downsizing its 173-room hotel – ostensibly because of “bad economic conditions” – and re-opening under a new corporation December 16. All employees were laid off in the interim.

“This is the first hotel to take a drastic measure to counter-balance the very negative impact that we all knew Measure N would have on the hotel industry,” said Randy Gordon, president and CEO of the Long Beach Area Chamber of Commerce. “We warned from the beginning it will kill jobs, it will not create jobs.”

According to the hotel letter, a copy of which was obtained by the Business Journal, the new corporate leadership will retain some employees while the rest will receive a severance of $1,000. It is unclear whether the downsizing will allow the Best Western to fall under the 100-room stipulation. Repeated calls for comment to hotel managers were unreturned.

“Let’s face it. I think common sense would tell you that they’re going to downsize to 99,” Gordon said, adding that others might follow suit, or challenge Measure N in the courts, or possibly enter into collective bargaining, all in an attempt to minimize the costs of the wage increase. “For every evading tactic that we would find . . . I think this council has to look at opportunities to correct that and remedy that,” Councilmember Suja Lowenthal said during the city council meeting. “We do know what the voters’ intent was.”

But, according to City Attorney Robert Shannon, the language of Measure N provides little in the way of compliance oversight. “This particular ordinance gives no law enforcement authority to the city,” he added.

Hotel workers do have the right to file a class action lawsuit in the event that they do not receive the wage increase, and the city council might later take legislative action to ensure compliance, Shannon said. But, ultimately, ensuring that hotels follow the spirit of the measure largely requires the vigilance of workers.

“It’s one thing to pass the law,” Leigh Shelton, spokesperson for UNITE HERE Local 11, the union responsible for Measure N’s appearance on this year’s ballot, told the Business Journal in November. “We need to make sure it’s enforced, too.”